Frankfurt stock market squares off against London

German stock market operator Deutsche Boerse (IOB: 0H3T.IL - news) said Monday it would launch an "EU-based alternative" for some key financial transactions as it bids to snatch business from London after Brexit.

Its subsidiary Eurex has partnered with big international banks including Bank of America Merrill Lynch, Deutsche Bank (IOB: 0H7D.IL - news) and JP Morgan, hoping to attract more work in "clearing" -- or guaranteeing complex financial deals will be completed.

Monday's announcement relates to "interest rate swaps", which firms use to hedge against or bet on changes in interest rates.

Clearing is one of the major battle lines being drawn between London and European financial centres as Britain prepares to leave the European Union.

Brussels unveiled plans in May to deny London the right to host clearing transactions denominated in euros -- potentially costing the British capital trillions in financial flows per year.

And once Britain leaves in March 2019, UK-based banks face losing "passporting" rules that allow them to sell services across the 28-member bloc unhindered.

Capitals including Paris, Amsterdam and Dublin have flung resources into coaxing banks to prepare for Brexit by setting up shop on their territory.

But Germany's sober financial hub Frankfurt has so far outshone its glitzier cousins.

Around 10,000 new banking jobs are expected to spring up in the city on the Main river, according to a study commissioned by lobby group Frankfurt Main Finance.

Major US and Asian banks have already committed to Frankfurt.

Britain's Sunday Times newspaper reported this week that Goldman Sachs (NYSE: GS-PB - news) and four other banks were spending tens of thousands of euros booking places in the western German city's English-speaking international schools -- a full year before any of their employees have moved.

Goldman Sachs also said last week that it had leased space for around 1,000 workers in the Marienturm, an under-construction Frankfurt skyscraper.

Source: AFP